The correct configuration is to set up a project group with a 'Time and material' project type, enable WIP accounting, and define billing rules. This works because WIP accounting for time and material projects allows revenue to be recognized as costs are incurred, matching the company’s need to track project costs and revenue in real time, while billing rules automate invoice generation based on project progress without manual intervention. On the MB-920 exam, this scenario tests your understanding of the Project management and accounting module’s standard features, specifically how project groups, funding limits, and billing rules interact to support WIP accounting and automated invoicing. A common trap is confusing WIP accounting with the completed contract method, which defers revenue recognition; remember that for time and material billing, WIP is the default to align revenue with costs. Memory tip: WIP for T&M means “When Incurred, Profit” — revenue hits as costs hit.
MB-920 Describe Dynamics 365 Finance Practice Question
This MB-920 practice question tests your understanding of describe dynamics 365 finance. This is a configuration task: choose the command set that satisfies every stated requirement. Small differences — like 'secret' vs 'password' or 'transport input ssh' vs 'all' — change whether the answer is correct. After answering, compare your reasoning against the explanation and wrong-answer breakdown below. Once you have made your selection, read the full explanation to reinforce the concept and understand why each distractor is designed to mislead on exam day.
You are a Dynamics 365 Finance consultant for a service company that uses the Project management and accounting module. They need to track project costs and revenue, and bill customers based on time and materials. The company wants to use the 'Work in process' (WIP) accounting method to recognize revenue as costs are incurred. They also need to automatically generate invoices based on project progress. Requirements: 1) Use WIP accounting for projects. 2) Automate invoice generation. 3) Use standard features. Which configuration should you set up?
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
✓
Set up a project group with 'Time and material' project type, enable WIP accounting, and define billing rules.
Setting up project groups with WIP accounting and using project contract funding limits and billing rules allows automatic invoice generation based on progress. Option B is correct.
Key principle: Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
✗
Enable 'Accruals' in project parameters and use periodic tasks to generate invoices.
Why it's wrong here
Accruals are not the same as WIP.
✗
Configure a project group with the 'Fixed-price' project type and use progress billing.
Why it's wrong here
Fixed-price is not time and materials.
✗
Use the 'Cost record' journal to post costs and manually create invoices.
Why it's wrong here
Manual invoicing does not meet automation requirement.
✓
Set up a project group with 'Time and material' project type, enable WIP accounting, and define billing rules.
Why this is correct
Time and material with WIP and billing rules automate invoicing based on costs.
Related concept
Read the scenario before looking for a memorised answer.
Common exam traps
Common exam trap: answer the scenario, not the keyword
Many certification questions include familiar terms but test a specific constraint. Read the exact wording before choosing an answer that is generally true but wrong for this case.
Detailed technical explanation
How to think about this question
This question should be treated as a scenario, not a definition check. Identify the problem, the constraint and the best action. Then compare each option against those facts.
KKey Concepts to Remember
Read the scenario before looking for a memorised answer.
Find the constraint that changes the correct option.
Eliminate answers that are true in general but not in this case.
Use explanations to understand the rule behind the answer.
TExam Day Tips
→Underline the problem statement mentally.
→Watch for words such as best, first, most likely and least administrative effort.
→Review why wrong options are wrong, not only why the correct option is correct.
Key takeaway
Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Real-world example
How this comes up in practice
A startup's cloud architect reviews their monthly bill and notices costs are higher than expected for a long-running batch job. Switching from on-demand instances to Reserved Instances — or using Spot/Preemptible VMs — can reduce compute costs by up to 72 %. Questions like this test whether you understand the tradeoffs between commitment, flexibility, and cost across cloud pricing models.
What to study next
Got this wrong? Here's your next step.
Identify which MB-920 exam domain this question belongs to, then review the specific concept being tested. Practise related questions in that domain and focus on understanding why each wrong answer is tempting — not just why the correct answer is right.
Describe Dynamics 365 Finance — This question tests Describe Dynamics 365 Finance — Read the scenario before looking for a memorised answer..
What is the correct answer to this question?
The correct answer is: Set up a project group with 'Time and material' project type, enable WIP accounting, and define billing rules. — Setting up project groups with WIP accounting and using project contract funding limits and billing rules allows automatic invoice generation based on progress. Option B is correct.
What should I do if I get this MB-920 question wrong?
Identify which MB-920 exam domain this question belongs to, then review the specific concept being tested. Practise related questions in that domain and focus on understanding why each wrong answer is tempting — not just why the correct answer is right.
What is the key concept behind this question?
Read the scenario before looking for a memorised answer.
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Question Discussion
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